Developers Eye Wetland Projects After Florida Loosens Mitigation Rules

Wetland projects in South Florida are notoriously difficult to get a handle on for developers who need to jump through strict regulations, receive permits and minimize their environmental impacts.

Developers chase them anyway because of how little developable land is left in the region, bounded by the Everglades to the west and the Atlantic Ocean to the east. 

But a new Florida law passed this year made it easier to bypass hurdles by expanding access to mitigation credits — permits developers purchase to offset potential environmental damage their projects cause — which have been in short supply in developed areas.

Senate Bill 492, which went into effect July 1, allows developers to buy and apply credits from wetland banks far from their projects if local credits are depleted.

Now, developers, able to build on protected wetlands that otherwise had been maxed out, have more possibilities before them, they said at Bisnow’s South Florida Industrial and Logistics Summit on Tuesday.

“The pro is that if you have a site that you're buying, you know there's at least a way to get credits. You're just going to have to pay for it,” Butters Construction & Development Director of Acquisitions Adam Vaisman said onstage at the Hilton Fort Lauderdale Marina. “Before, you may not even have an ability to get credits, therefore, you can’t even break ground on your project.”

Florida enacted its mitigation banking system in 1993 to help fund restoration of the state's wetlands after a study by the University of Florida found that it had lost more than a quarter-million acres of wetlands and deepwater habitats between the 1970s and 1980s, WLRN reported.

Mitigation credits for banks, like the Everglades and Devils Swamp, are auctioned off to developers and their consultants. Before the legislation passed, one credit would sell for around $100K, Vaisman said.

After the law broadened access to mitigation credits, prices soared to about $700K a credit, especially in high-demand areas like South Florida, panelists said. Developers today might pay up to $70M for mitigation credits for just one project.

The proceeds are used to offset the environmental impact in the areas they are building on by helping clean water, soak up floods and keep coastlines from eroding.

“You don't have any perpetual, ongoing obligation,” Greenberg Traurig shareholder and environmental lawyer Kerri Barsh said in an interview. “You're paying for that. You're going to pay more … but that allows you to get your permit and move forward with those activities.”

The demand for credits to build in mitigation deserts was so high that some private groups are creating their own wetland banks to sell credits, Vaisman said.

A developer can show it can avoid or minimize the disturbance to the environment with its project instead of buying a credit, but credits are the easier and quicker route to getting shovels in the ground.

Mitigation banking has allowed developers like Miami-based homebuilder Lennar to pave over hundreds of acres of wetlands to build homes over the years, WLRN reported, referencing the Florida Department of Environmental Protection mitigation bank ledgers.

The auctioning process had become tedious as credits dwindled, and many developers would be left with nothing, The Easton Group Vice President Dalton Easton said.

In many cases, the scarcity of credits was the difference between closing a deal and having to walk away. Vaisman had a property under contract that needed mitigation credits, but the seller couldn’t offer more time to obtain them.

“We unfortunately had to let go of that one, because you're buying a site and you don’t know if you’re going to be able to develop in one year or 10 years,” Vaisman said.

While the new state law helps developers meet environmental requirements faster, some experts worry that the credits they buy from one ecology won't offset the impact to the area they are building in, the South Florida Sun Sentinel reported.

Friends of the Everglades, a conservationist and activist organization founded in 1969, strongly opposed the bill, even pleading with Gov. Ron DeSantis in a letter to veto the legislation, which he signed in June.

“This undermines the foundational principle that environmental damage should be offset through local, ecologically relevant restoration,” the letter reads. “Diluting this standard not only jeopardizes the effectiveness of wetland mitigation but sets a dangerous precedent for future development and resource management.”

But developers, eager to cash in on demand for housing and industrial space in South Florida, nevertheless plan to take advantage of the new rules.

“[The legislation is] definitely a unique way of adding more supply to wetlands credits and giving some folks availability to get some sites out of the ground,” Easton said.